Alliant Techsystems Inc. (ATK) received a $35.8 million contract from the U.S. Army to further refine the Hard Target Void Sensing Fuze (HTVSF) design and to perform all qualification testing necessary to move into production.
The contract was awarded under the HTVSF program, which is a three-way joint venture among the U.S. Air Force, the U.S. Navy and Alliant. The 37-month contract was awarded by the Air Armament Center, Eglin Air Force Base, Florida.
Alliant will perform the design and test work on the HTVSF contract, which starts immediately, at its facilities in Plymouth, Minnesota, and Rocket Center, West Virginia.
Alliant said the HTVSF is an advanced technology, cockpit-programmable fuze that enables better targeting of underground bunkers and similar objects. It provides multiple delay armings and detonation times, allowing weapons to destroy deeply buried targets not reachable by other fuzing options.
Alliant has been developing hard target defeat fuzing technology for more than a decade and has taken the best attributes and incorporated them into the HTVSF. The company expects to deliver a fuze with unprecedented survivability and precision into the hands of warfighters to allow destruction of high-value, deeply-buried targets not reachable with today’s fuzing options.
Alliant’s expertise in the design, development and production of innovative, reliable and affordable precision fuzing products positions it well to meet future needs, in our view. Upon successful completion of the contract, Alliant expects to transition into low rate initial production (LRIP) in April 2014 and then become the primary supplier of the HTVSF.
Minneapolis, Minnesota-based Alliant Techsystems is a premier aerospace, defense and commercial products company operating in 24 states, Puerto Rico and internationally. It earns revenues of approximately $4.8 billion. The company supplies products to U.S. government agencies, and its prime contractors and sub-contractors. It also supplies ammunition and related accessories to law enforcement agencies and commercial customers.
We retain our long-term Neutral recommendation on the stock. Also, Alliant currently has a short-term Zacks #3 Rank (Hold), which is in line with its closest peers General Dynamics Corp. (GD) and Raytheon Co. (RTN).
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